Turkey shaken by financial fears, Trump rattles it further

A financial shockwave ripped through Turkey on Friday as its currency nosedived on concerns about its economic policies and a dispute with the U.S., which President Donald Trump stoked further with a promise to double tariffs on the NATO ally.

The lira tumbled 13 percent in one day, to 6.51 per dollar, a massive move for a currency that will make the Turkish poorer and further shake international investors' confidence in the country.

The currency's drop — 40 percent so far this year — has become a gauge of fear over a country facing the fallout of years of debt-fueled growth, international concern over President Recep Tayyip Erdogan's push to amass power, and a souring in relations with allies like the U.S.

The diplomatic dispute with the U.S. was one of the triggers for the turmoil this week.

Turkey has arrested an American pastor and put him on trial for espionage and terror-related charges linked to a failed coup attempt in the country two years ago. The U.S. responded by slapping sanctions on Turkey and threatening more.

After inconclusive talks this week on solving the spat, Trump took advantage of Turkey's turmoil on Friday to turn the screws on the country.

Trump tweeted that he had authorized the doubling of steel and aluminum tariffs "with respect to Turkey."

Trump said tariff on aluminum imports would be increased to 20 percent and the tariff on steel imports will be raised to 50 percent as the Turkish Lira "slides rapidly downward against our very strong Dollar!"

He declared: "Our relations with Turkey are not good at this time!"

The United States is the biggest destination for Turkish steel exports with 11 percent of the Turkish export volume. The lira fell further after Trump's tweet.

In what appears to be a diplomatic riposte, Turkey later said Erdogan had held a phone call with Russian President Vladimir Putin to discuss economic ties. It did not disclose details, but suggests Turkey might gravitate further away from its NATO allies toward cooperation with Russia, whose relations with the West are at their lowest since the Cold War.

Turkey's woes have been aggravated by investor worries about the economic policies of Erdogan, who won a new term in office in June with sweeping new powers.

Erdogan has been putting pressure on the central bank to not raise interest rates in order to keep fueling economic growth. He claims higher rates lead to higher inflation — the opposite of what standard economic theory says.

Independent analysts argue the central bank should instead raise rates to tame inflation and support the currency.

In modern economies, central banks are meant to be independent of governments to make sure they set policies that are best for the economy, not politicians. But since adopting increased powers, Erdogan appears to have greater control over the bank as well.

Erdogan on Friday appealed for calm and renewed a call on people to change foreign money into local lira.

"Change the euros, the dollars and the gold that you are keeping beneath your pillows into lira at our banks. This is a domestic and national struggle."

He appeared to blame foreigners for trying to hurt Turkey, saying: "This will be my people's response against those waging an economic war against us."

On Thursday, Erdogan said "If they have their dollar, we have the people, we have Allah."

Treasury and Finance Minister Berat Albayrak — who is Erdogan's son-in-law — tried to ease investor concerns during a conference, saying the government would safeguard the independence of the central bank.

"One of our principles will be ensuring the full independence of monetary policy," Abayrak said as he outlined his ministry's "new economic model."

The currency drop is particularly painful for Turkey because the country finances a lot of its economic growth with foreign investment. As the currency drops, Turkish companies and households with debt in foreign currencies see their debts expand.

Coupled with an inflation rate of nearly 16 percent, that could cause a lot of damage to the local economy.

Foreign investors could be spooked and try to pull their money out, reinforcing the currency drop and potentially leading to financial instability.

Aylin Ertan, a 43-year-old caterer in Ankara, said she was concerned over the future of her small business.

"The price of the food that I buy increases day by day, the fuel that I put in my car to distribute lunches is more expensive, but I cannot raise my prices from one day to the next," she said. "On some days, I end the day with a loss."

Turkey's woes shook world markets, pushing down stock indexes and lifting the dollar, which traders around the world typically buy in times of concern.

On Friday, the euro sagged to a 13-month low against the dollar, down 0.7 percent to $1.1450, on concerns that European banks operating in Turkey could suffer losses.

But analysts say that while there may be losses at some banks, Turkey's economic problems do not pose a big threat to Europe or other big economies like the United States.

The US president's announcement on Twitter has sparked protests and outrage in Washington and beyond.
US President Donald Trump. Source: 1 NEWS


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Firefighters battle to curb arson wildfire in California before winds return

Aircraft turned hillsides red with retardant as homeowners wet their houses with garden hoses in a battle to contain an arson wildfire, which prompted evacuation orders for more than 20,000 people south of Los Angeles.

Governor Jerry Brown declared a state of emergency on Thursday night local time for Orange and Riverside counties as a four-day-old fire carved its way along ridges and hillsides of the Cleveland National Forest.

Brown's proclamation said thousands of homes were threatened by the fire in the foothills above Lake Elsinore and nearby communities and ordered state agencies to help local governments.

Firefighters planned to work through the night to gain ground against the blaze before the expected Friday afternoon return of blustery winds that might drive the flames to new ferocity.

A resident of Holy Jim Canyon in the forest was scheduled for a court hearing Friday on charges that he deliberately set the fire.

Forrest Clark, 51, is charged with arson and other crimes and could face life in prison if convicted. 

As flames raged closer to foothill homes on Thursday, some residents ignoring evacuation orders stood in driveways or on top of roofs and used garden hoses to wet down their property as smoke billowed around them.

Firefighters fought a desperate battle as huge flames came within yards of some homes, feeding on dense, dry chaparral and propelled by 30-kph gusts. They want to encircle the fire before it can devour neighbourhoods and take lives, as gigantic fires still burning in Northern California have done.

Although the fire - named for the canyon where it started - destroyed a dozen cabins after breaking out Monday, fire crews were able to prevent further losses but the fire was still virtually uncontrolled as its growth nullified progress in corralling it.

Wind speeds and temperatures dropped as night fell but gusty winds could pick up again Friday afternoon, the National Weather Service warned.

Meanwhile, two major wildfires - one called the Mendocino Complex Fire that is the largest in California history - were burning more than 160 kilometres north of Sacramento.

Crews turned a corner and achieved 51 per cent containment of the Mendocino Complex - actually twin fires that are being fought together. 

The fire destroyed more than 100 homes and has blackened an area about the size of the city of Los Angeles.

In the Redding area, the year's deadliest fire was nearly half surrounded and was burning into remote and rugged forest land but grass, brush and trees there are so dry from years of drought and recent heat that the potential remained for the fire to grow, state fire officials said.

The Carr Fire, as it's called, killed six people, including two firefighters, and burned more than 1,000 homes. Two other people - a state fire heavy equipment mechanic assigned to the fire and a utility worker trying to restore power near the fire- have died in car accidents.

The fires all grew explosively in the past two weeks as winds whipped the flames through forest and rural areas full of timber and brush that is bone-dry from years of drought and a summer of record-breaking heat.

Air quality has been another casualty of the fires. A smoky haze stretches from the foothills of the Sierra Nevada mountain range to Sacramento and hovers over the San Francisco Bay Area, with most major population centers in between suffering air quality that's considered dangerous for children, the elderly and people with asthma or other respiratory conditions.

The smoke even drifted as far east as Salt Lake City in Utah.

The sheer size of the fires is numbing in a state that is still reeling from enormous blazes last year and has yet to hit its historically most dangerous months.

Firefighters had almost contained a huge fire near Yosemite National Park.

New Zealanders and Australians are tackling a monster blaze in Mendocino, north of San Francisco. Source: 1 NEWS

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Aussie mum admits child abuse took place at her swingers parties

The mother at the centre of a police investigation into "swinging" sex parties that allegedly involved the sexual abuse of children has pleaded guilty to some of her charges.

The 39-year-old woman, who cannot be named, pleaded guilty in Perth Magistrates Court on Friday to 17 offences including sexual penetration of a child, indecently dealing with a child and indecently recording a child.

She will next appear in the West Australian District Court on September 14.

The woman still has 93 other charges pending and will return to Perth Magistrates Court on November 13.

Five people have been charged under Taskforce Mirzam, which was launched in February following the discovery of a recording device that allegedly contained videos of men and women engaging in sex acts with the woman's daughter.

Source: Breakfast